Macquarie Reaches Deal to Buy Rest of Spain’s Viesgo

(Bloomberg) -- Macquarie Group Ltd.’s infrastructure arm has agreed to buy the 40% of Viesgo it doesn’t already own in a transaction valuing the Spanish electricity distributor at about 3 billion euros ($3.3 billion), a person familiar with the matter said.

Macquarie is buying the stake from Wren House Infrastructure, said the person, who asked to not be identified because the matter isn’t public. Macquarie already owns 60% of Viesgo.

Wren House, a unit of Kuwait’s sovereign wealth fund, was in discussions to sell the stake to Ontario Teachers’ Pension Plan, but Macquarie exercised its pre-emption right to buy the stake, the person said. The deal gives Wren House an internal rate of return of more than 30%, the person said.

Representatives for Wren House, Macquarie and Ontario Teachers declined to comment. A representative for Viesgo didn’t immediately respond to a request for comment.

While the coronavirus crisis is hampering dealmaking globally, the infrastructure industry is seeing a spate of activity as investors seek to buy long-term, cash-yielding assets immune from the turmoil. KKR & Co. said Wednesday it agreed to buy the waste-management arm of the U.K.’s Pennon Group Plc for 4.2 billion pounds ($4.9 billion) including debt, in one of the biggest acquisitions since the pandemic started roiling markets.

Macquarie and Wren House acquired Viesgo in 2015, when it was known as E.ON Spain. Viesgo, whose origins date back to 1906, has almost 700,000 customers in the north of Spain and production of 1,400 megawatts, according to its website. Macquarie and Wren House sold some unregulated Viesgo assets to Repsol SA for about 750 million euros ($808 million) in 2018.

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